Critics of Floating Exchange Rates Question the Closeness of the Link

Multiple Choice

Critics of floating exchange rates question the closeness of the link between the exchange rate and the trade balance.They claim trade deficits are determined by the:

A) balance between savings and investment in a country.
B) external value of the currency of a country.
C) expansionist monetary policies adopted by a country.
D) extent of government control of industries in a country.